After six months of often emotional hearings, an administrative law judge is nearing a decision on whether the Environmental Protection Agency can lift its 10-year-old ban on a potent poison once used widely by western ranchers to kill coyotes.

The reinstatement hearings on sodium fluoroacetate, commonly called Compound 1080, were ordered on a "expedited" basis by EPA Administrator Anne M. Gorsuch.

The hearings represent the first time the agency has ever considered a petition to withdraw an agency ban, according to EPA spokesman Al Heier, and the precedent-setting case has become a classic confrontation between wildlife enthusiasts and western ranchers.

Witnesses for the Defenders of Wildlife, Friends of Animals and the National Wildlife Federation argued that ranchers can use a number of husbandry techniques, including guard dogs, electric fences, coyote-frightening devices, sheep pens and newly developed taste aversion methods, to avoid stock losses to predators.

If ranchers are allowed to spread "a lethal poison throughout the entire West," dozens of other species besides coyotes will be killed when they accidentally eat poisoned bait or feed on the remains of coyotes or other animals that have been killed by the poison, the opponents said in their final arguments.

Witnesses for the Interior Department, American Farm Bureau Federation and the states of Texas, Wyoming, South Dakota and Montana claim EPA did not have all the facts when it banned the poison and contend that new techniques make it possible to use the poison safely without endangering other animals.

While many husbandry techniques can reduce stock losses, the proponents said most of them are too expensive, unreliable or not suitable for ranchers who have large herds and flocks in open range states like Wyoming.

If 1080 is not reinstated, they claim, coyotes will put many ranchers out of business and the price of wool products will rise.

President Reagan picked sides earlier this year when he revoked a presidential order signed by President Nixon that banned 1080 use on federal lands. EPA's ban supersedes Reagan's directive, so the only purpose his decision served was to put him on record favoring reinstatement of Compound 1080.

Compound 1080 attacks the nervous system and heart, according to testimony. There is no known antidote for the poison, which was developed in Germany during World War II and became widely used here between 1950 and 1972 as a pesticide.

EPA banned 1080 in 1972 because, it said, the poison threatened humans (13 accidental human poisonings were recorded during a nine-year period) and because a number of animals besides coyotes were being killed by it, including the California condor, an endangered species. At the time, the most common method of using 1080 was to inject large amounts of it into a horse or sheep carcass and dump it in an area frequented by coyotes.

Between 1973 and 1980, the agency rebuffed several attempts by western states to reinstate the poison, in one case fighting the petition in court. That case was resolved in EPA's favor by an appellate court.

But in 1981, Gorsuch responded to the ranchers' renewed pleas by calling for hearings to determine whether new evidence existed that would justify reexamining 1080. Those hearings were held in July, 1981.

In December, Gorsuch said new evidence existed that suggested "EPA overestimated the environmental hazards" of 1080 when it banned it. According to hearing documents, she also suggested that new methods for using the poison might reduce the hazard to humans and animals other than coyotes. One new method is the "toxic collar", a rubber collar filled with 1080 that is supposed to be released only when an animal bites a sheep's neck.

A few weeks after Gorsuch ordered reinstatement hearings, a California scientist whose work she had cited heavily announced that EPA had changed and falsified his research.

"EPA needed some pivotal scientific basis to justify and trigger these hearings," a spokesman for the scientist said. "So they misrepresented his statements." EPA denied the charge.

The agency held hearings in San Angelo, Tex., Denver and at its headquarters here. In all, 90 witnesses testified, 15,000 pages of transcripts were recorded and 100 exhibits presented. The agency budgeted $100,000 for the hearings.

One of the most grisly pieces of evidence was a short film presented by wildlife groups that showed a dog poisoned with 1080. The poison caused convulsions and a painfully slow death. Sometimes the poison can take from two to 12 hours to kill its victim, a witness testified.

The Pacific Legal Foundation, which represented the western states, responded by calling a Texas sheepherder who told in graphic detail how a coyote had ripped apart a sheep that he and his family had nursed to health. "It tears you up . . . drives you crazy. Your whole family works . . . and then coyotes take what you've spent all your time on."

The ranchers claimed their livestock losses have increased dramatically since 1080 was banned, and the poison is the only effective weapon they have against coyotes. They said the poison now can be safely dispensed by using such methods as toxic collars and "smear posts," poles impregnated with 1080 and other chemicals that attract coyotes but repel other animals and humans.

The wildlife groups said there was no proof that the number of sheep killed by coyotes had increased since the banning of 1080, and they disputed the ranchers' contention that toxic collars were safe. Witnesses suggested the collars could be carried anywhere by a coyote or sheep and could be lost, endangering animals and humans. One witness told how he became ill after simply handling 1080 bait that was wrapped in three layers of plastic.

Judge Spencer T. Nissen is expected to make his decision within 30 days, a spokesman said. Either side can appeal it to Gorsuch, who would be under no time limit to make a ruling.